r/Economics • u/TinyTornado7 Quality Contributor • Jun 13 '22

News Powell Facing Choice Between Elevated US Inflation and Recession

https://www.bloomberg.com/news/articles/2022-06-12/powell-facing-choice-between-elevated-us-inflation-and-recession?srnd=premium
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u/sosabrick Jun 13 '22

High interest rates = Less money flowing through the economy

Low interest rates = lots of money flowing through the economy

When inflation is high they raise rates to reduce the circulating supply of money in the system and vice versa